Welcome back! Ask questions, get answers, and join our large community of tax professionals.
cancel
Showing results for 
Search instead for 
Did you mean: 

Can and how to input PPP loan forgiveness into Lacerte?

bill16
Level 2
how to input PPP loan forgiveness
0 Cheers

This discussion has been locked. No new contributions can be made. You may start a new discussion here

24 Comments 24
sjrcpa
Level 15

What type of return are you preparing?


Ex-AllStar
bill16
Level 2

1120 S

Txs

0 Cheers
sjrcpa
Level 15

M-1 Income on books not on return. It goes in OAA on M-2.


Ex-AllStar
TaxGuyBill
Level 15

I just posted this on another thread, but doesn't that amount increase Basis?  If so, where do you enter it so the K-1 shows that in the Basis box?

sjrcpa
Level 15

Yes it does increase basis. There is no basis shown on an S Corp K-1, or on a 1065 K-1 for that matter. Tax basis capital on 1065 K-1s may or may not equal basis.

If the software is calculating shareholder or partner basis, I assume it would pick up this tax exempt income and add to basis, but I could be wrong. Haven't tested it yet. If it doesn't, I would input in the Other Increases to Basis line.

 


Ex-AllStar
sjrcpa
Level 15

OK I got curious. For an S Corp shareholder it does add it to shareholder basis.


Ex-AllStar
TaxGuyBill
Level 15

But Box 16 of the K-1 would be affected, so you can't ONLY enter it on the Balance Sheet and M1.  As you said, you need to enter it somewhere as tax-exempt income so Box 16 is affected, right?

0 Cheers
IRonMaN
Level 15

Sounds right.


Slava Ukraini!
sjrcpa
Level 15

My Lacerte test put it in as 16B on the K-1.


Ex-AllStar
JohnCPACFP
Level 3

Schedule M-1, Other tax-exempt income.  You will have to determine if your state follows the fed.

DLP
Level 2

Lacerte added an input field on screen 31 for PPP loan forgiven, but it's an override field.  It also doesn't appear to be calculating currently either to OAA, basis schedule or M-1.  Anybody seen a non-override field?

0 Cheers
JohnCPACFP
Level 3

They added a field in Income (Screen 13) for the PPP loan.  However, it doesn't work at all and doesn't show up anywhere.   Entering it on M-1, as Other Tax-exempt Income, will carry it to Book Income, OAA, and Basis where it should be found. 

KJ2
Level 1

s corp

0 Cheers
accoun5
Level 4

So far, California treats the $1K EIDG grant as taxable income for California. Is there an input field in Lacerte to input taxable EIDG grant for California? In the Screen 16 for individual module Schedule C, I only see an input field to enter expenses paid with PPP loan. Nothing about the EIDG grant.

0 Cheers
JohnCPACFP
Level 3

There is a place for PPP forgiveness in the 1120S and 1065, but not Schedule C (yet).  The line for PPP forgiveness should include EIDL grants and loans, since they all the same for tax purposes, but it doesn't mention either one.    There is suppose to be a line for nonconforming states, but it hasn't been implemented yet.  Expenses paid with PPP money is a moot point after the 12/27 bill and should not be a factor anywhere.

accoun5
Level 4

Thanks-I appreciate it.

0 Cheers
Jamiejs2
Level 2

If the Expenses paid with the PPP Loan (Forgiven) are "moot," should they reduce the cost of whatever was purchased with them? One of my S-Corp clients bought Inventory with it. Does that reduce the Cost of Sales "Purchases"?

0 Cheers
abctax55
Level 15

@Jamiejs2 

No.

"*******Tax software is no substitute for a professional tax preparer*******
( Generic Comment )"
Jamiejs2
Level 2

Thank you. Sorry, but I made a "late night-working too long" boo-boo. The Inventory purchases were made with another, not PPP, loan. The PPP loan did pay the wages. Are the Wages reduced by the amount of the Forgiven PPP Loan? Or does that also go on the K-1, at line 16c? Appreciate your help!

0 Cheers
TaxGuyBill
Level 15

The PPP, including the forgiven PPP, don't affect ANY deductions.

Yes, the forgiven amount is entered on Schedule K as tax-exempt income.

0 Cheers
Jamiejs2
Level 2

The Forgiven amount on K-1, Line 16B, and the Expenses paid with it on K-1, Line 16B?

0 Cheers
TaxGuyBill
Level 15

Don't do ANYTHING different with deductions.  PPP does not change anything with the deductions.

0 Cheers
Jamiejs2
Level 2

The PPP Loan is $40,000. Since it goes on the K-1, Line 16B, the S/H Equity is increased by $40,000, and the Balance Sheet is off by $40,000.  What Journal Entry should the client have made when the Loan was forgiven? 

0 Cheers
Joeghanem
Level 1

S Corporation

0 Cheers